Edinburgh trams: Costs hit £600m with two years to go

More trouble for the trams? Costs are rising and rising
More trouble for the trams? Costs are rising and rising
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MORE than £150 million has been spent on Edinburgh’s troubled trams scheme in the last 12 months, bringing the price to almost £600m and raising concern the total cost of the scheme could exceed its latest budget.

Figures released to The Scotsman show more than £150m has been eaten up in the last year alone to take spending way over the original project budget of £545m with at least another two years of work still to be carried out. About £70m has been spent over the last three months alone, with the final tally reaching £592m by the end of March.

Tram works on Princes Street. Picture: Neil Hanna

Tram works on Princes Street. Picture: Neil Hanna

It emerged last night that, of this figure, £440m has come direct from Transport Scotland, the Scottish Government’s transport agency.

But with three quarters of the funding available for the project now gone, widespread disruption is still expected in several parts of the capital for the forseeable future.

A timetable of planned work shows that most major sections are not due to be completed until early in 2014. Only the tram depot at Gogar has been finished so far.

Opposition councillors have expressed fears that the project’s costs are set to spiral out of control again between now and when trams are due to open to the public in the summer of 2014.

However, the council insists the project is still within the new budget of £776m, which councillors agreed to in September and is adamant that a £34m “contingency fund” is still in place.

Work on the project started just over five years ago, but was derailed by a damaging dispute between Transport Initiatives Edinburgh (Tie), the council-run company created to deliver the scheme, and the main contractors Bilfinger Berger, with protracted legal battles thought to have added another £100m to the final bill.

Other major work has been carried out, particularly along Leith Walk and into the docks area, despite the waterfront tram link being chopped from the current plans due to a lack of funding.

Steve Cardownie, deputy council leader, who wanted the project scrapped until his SNP group voted to bail it out last autumn, said: “The amount that has been spent on this project completely vindicates what I was saying about the trams back in 2007. I felt there was no way the original line to the waterfront could have been delivered for the budget of £545m that had been set at the time, as the business case just did not stack up.

“We just feel that the people of Edinburgh, who had the trams imposed on them, are now desperate to see this project finished. There is a much better chance of that happening within the new budget since the council took a much firmer control of it last year.”

Just two sections of tram line have been finished so far – a test track at the depot at Gogar and another section at Haymarket Yards. Although work on the majority of Princes Street is expected to be finished in June, allowing buses, taxis and bikes to return, St Andrew Square is likely to see work continue until the festive season.

According to the latest timetable of works, seen by The Scotsman, work on the line between Haymarket and Gogarburn is expected to continue at sections along the route until the autumn of next year. And work to install overhead lines and electrification systems between Haymarket and York Place, where the first phase will end, is set to continue until 2014, just months before the scheme is set to go live.

A spokesman for the council said: “The project is going through its most constructive period to date, with work under way on all sections of the route between Edinburgh airport and St Andrew Square. This has gained fresh momentum due to the close working relationship between the council, the contractors and Transport Scotland.

“Work continues to progress well along the full length of the route from the airport to St Andrew Square and in line with the revised programme published in December.

“The depot was delivered on time, The Mound was re-opened four months early and we expect works on Princes Street west of Waverley Bridge to be completed by June – a month ahead of schedule. Overall, we remain on course to deliver the project within the revised budget by summer 2014.”

However, Lesley Hinds, Labour’s transport spokeswoman at the council, said: “I think people will be shocked that all this money has been spent so far, and that even after all the work is finished in another couple of years we are not even going to get a full tram line.

“It’s nonsense for the council to claim the project is ahead of schedule when it is running years late and it has gone way over budget. I’m very cynical that the cost is not going to rise again as it has had to be revised so many times in the past and it is very difficult to believe anything you are told about this project.”

John Carson, a former director of maintenance at Network Rail, who has been a long-time critic of the trams project, said: “I cannot see any way this project is going to come in under £776m.

“You only have to look at various sections of the route, particularly at Haymarket and St Andrew Square, to see how much work still needs to be done.

“I can’t understand how anyone can say some of the work is ahead of schedule when it is so far behind and we haven’t even seen any substantial work take place on York Place, where they now want to build a new tram stop. They could get trams up and running by the summer of 2014 if they throw a lot of money at the project, but this figure they are now quoting for the final budget is one that was given to them years ago by the contractors. It’s bound to go over that over the next couple of years.”

The tram project was originally awarded £375m from the then Scottish Executive in 2003 and two initial lines were supposed to be finished five years later.

By 2008, when the overall budget had leapt up to £545m and a final contract for £512m was signed off, it was thought the council only had enough funding to pay for an initial line, from the airport to Newhaven.

But numerous problems with underground utility works and a dispute with contractors over who should foot the bill for delays saw the cost of getting the scheme off the ground balloon to £776m by last September, when the SNP government stepped in to insist its transport agency take over the project.

The council had already admitted the first phase would be curtailed at the city centre – with the prospect of finishing the section between York Place and the city’s waterfront put off indefinitely – despite conceding that the price tag getting trams up and running would top £700m.

The final figure is expected to top £1 billion when borrowing charges are included, as the Scottish Government has refused to increase the £500m grant MSPs voted in favour of, despite the SNP’s opposition, in 2007. By last April some £440m of this grant had been spent, even though work had ground to a halt on most of the route since the dispute with the German-led construction consortium was revealed in February 2009.

A spokeswoman for Transport Scotland said the agency had still to pay the council £60m for the remaining works. She added: “We continue to work with the council to ensure that the project is progressing well along the entire route and meets the programme and budget agreed last year.”